In June, we
announced a collaboration with the second consumer electronic company on the
Fortune Global 500 list to develop a display engine for an innovative
smartphone product to be offered by this company. The new partner has
communicated to us that it targets market introduction of the new product in
the second half of 2015.

++++

Our business
development efforts are focused on 4 main go-to-market coalitions that involve
all the key stakeholders needed to enable a new market. In our case, the
coalition includes display engine manufacturers, consumer electronic OEMs [Note: multiple display engine manufacturers and
distinction between display engine manufacturers and OEMs, i.e. potentially STM
as display engine manufacturer and Lenovo as consumer electronics OEM]
and major retailers.

++++

Recall that
in 2013, we begun development of supply sources from MEMS and other key
components with some of the world leaders in their respective areas. [Note: Distinction that there are other key components
besides MEMS and multiple “supply sources”, so MEMS might come from one and
other components from other sources]

++++

And finally,
product OEMs, we're developing products based on our technology, utilizing the
engine of our partners, also need some of our market and technical support to
help them to get to deliver products to market. So we have 3 -- we're working 3
fronts right now, our own deliverables and then we supporting our partners,
both on the engine and the product side to help them to introduce the best
possible products as soon as they're ready. [Note:
Again the distinction between engine and product partners]

And then, on the new smartphone
opportunity, if they want sort of products out in the second half of next year,
would that suggest that you would see revenue on the first half of next year
related to that?

Typically, you're right, Mike.
Typically, there is a lead time on a component before they convert it into
engines before the products. So if they target product for the second half
2015, you need back probably 3 months to -- this is when we start -- we would
start receiving something from the engine manufacturers, who will be receiving
the orders from the product OEMs and OEMs, correct. [Note: AT “walks this one back” in Q3 CC transcript, that there will be
no product revenue from F500 in 1H 2015]

++++

Unknown Analyst

Great. You also discussed a large volume
capacity by the end of the year. Now is there 2 components? Are some of your
partners going to supply all the pieces on their own? Or will you be a supplier
in every case of at least part of the module?

We will be a supplier in most of the
cases because it's case-to-case specific. In some cases, we provide more; in
some cases, we provide less. But we should be a part of every endeavor, whether
it's engine manufacturer and, obviously, the engines from our partners will
flow into products of others. So yes, we expect to be in every module. [Note: Clear as mud, IMO. See no reason IP can’t be the
“in” for every module]

3Q 2014
CC

In June, we
announced a collaboration with the second consumer electronic company on the
Global Fortune 500 list, to develop a display engine for an innovative
smartphone product that is planned to be offered by this company. To remind
you, the new Fortune 500 partner has communicated to us that it targets market
introduction of this product in the second half of 2015. We successfully
completed the initial phase with this partner in Q3 [Note, this strikes me as a big “tell” that they were working with a pre-existing
technology partner like STM as the engine manufacturer, or else how in the
world did they complete the initial phase that quickly?] and are now
moving into the next development phase of this program.

++++

The most
important part from our side is to be ready with our MicroVision-specific
component and enable the engine manufacturers, one of them who you already know
and we announced [Note: And therefore at least
one more unannounced], to be ready to provide their solutions to the
product guys so they can basically start populating the retail channels.

This is Jim Fitzgerald sitting in for
Mike Latimore. So my first question is surrounding the smartphone opportunity.
Can you comment a little bit on what effect do you see that having on revenue
in the first half of 2015?

Remember -- recall that what I stated
today and what we stated during the release of this information that the
customer specifically told us that they are targeting second half of 2015, not
the first half of 2015. We anticipate that until then, we're going to be in
development phase and so no product revenue should be expected in the first
half of 2015. [Note: NO PRODUCT REVENUE SHOULD BE
EXPECTED IN THE FIRST HALF OF 2015 FROM F500 –this is “walking back” the Q2 2014
CC comments on 1H product revenue]

That's correct. We have agreement in
place. It's a smaller scale agreement than what we've done with Fortune Global 100
customer because we are contributing less. So it's a less investment --
resource investment on our part but yes, we're under agreement. Correct. [Note: Very interesting this comes out only in Q/A.
Heavily implies money changing hands at this point is very small, not
“material”, or would have had to be called out more specifically in official
quarterly reports. This goes hand-in-hand with less than 10% of the company
working on it actively (as opposed to supplying rights to 20 years of
intellectual property as main contribution).]

4Q 2014
CC

Last June we announced a collaboration with the second consumer electronic
company on the Fortune Global 500 list to develop a display engine for an
innovative smartphone product plan to be offered by this company.
We have made significant progress and advancement on the display module
development with them and they communicated to us that they target second half
of 2015 for market introduction of their product.

License for
us is just component. It’s a case specific, Mike. For example, Fortune Global
100 agreement may entail component sales and licensing. Another agreement could
entail sale of the components where licensors will be potentially built in into
component pricing. So it’s really -- you can predict at this point in time.

++++

They [Note: Sic, obviously “We”] are obviously
working with smartphone manufacturer. [Note: This
one strikes me as important because he’s actually committing to it being a
smartphone manufacturer (e.g. Lenovo would be an example), and not just a
smartphone accessories manufacturer (e.g. some sort of add-on sled)]

Sure. Sure. So we have to prioritize.
Just to give you example so everybody understands and make sure it’s clear. We
put 90% plus of our resources in past two years to make Sony a successful, 90%
plus. [Note: This means that they completed
“initial phase” with the F500 in record quick time with 10% or less of the
companies resources –another huge “tell” that they had to be working with a
pre-existing engine manufacturer partner]. If we did not do this, we
would have not been successful. So, we have to manage cash and we’d have to
focus on vital few. Now that we transition and we've done a lot of heavy lift
to support our Fortune Global 100 customer, we have resources become available
for other opportunities.

But in addition to what you said, yes,
our list has been -- we prioritize kind of top five and top five list changed
over the past two years because some companies slowed down, some companies
accelerated from the second top five and we moved them into the first top five.
So what we announced with the Fortune Global 500 companies, for example, they
were not on their original top five list but they moved in top five list once
we realized they have very exciting application and we are serious about moving
forward.

++++

Q1 2015
CC

Last June,
we announced a collaboration with a second consumer electronic company on the
Fortune Global 500 list, to develop a display engine for an innovative
smartphone product, planned to be offered by this company. We have made
significant advancements on the display module development with them, and
continued supporting them throughout last quarter.

Now, with respect to the Fortune 500
company, my understanding is, that they are developing their own module, and so
my question is, would they require a licensing commercial agreement related to
that?

Henry, it’s a great question. Its too
early for us to comment, because we are still in development. Once we complete
the commercial agreement, it will be determined, what specifically we supply,
and how the transaction will take place. Sometimes, we have situations where we
have royalty, as in the case of Sony sometimes. We provide more components. We
actually build in royalty into the component's price, so it will be determined
based on a commercial transaction, and once we get close to this, we would be
bale, potentially to provide more information.

“Directly responsibe for 2 Generation’s Business and Operations NPI program
management issues with ODM partners that manufacture the MEMS die and perform
final assembly of the Product. First generation launched and successfully sold
30,000+ units to Pioneer Corporation in 2012. Currently
in launch process of next generation with new die fab (ST Microelectronics MV)
and assembly partners. Includes day to day management of 2 in Asian
theater team members.”

Reference to ST Micro later deleted after it gained public
notice and was commented on at financial message boards.